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Nexus Mutual Expands Protection Against Centralized Exchange Hacks

  • DeFi coverage protocol Nexus Mutual expanded the list of centralized exchanges eligible for incident protection as users trading on Binance, Kraken, Coinbase and Gemini are now able to buy protection in the event of an exchange hack or prolonged withdrawal downtime.
  • The integrations were announced as part of Nexus Mutual’s “custody cover” initiative. Users who buy coverage will be eligible for compensation if the custodian gets hacked and the user loses more than 10% of their funds.
  • The program was launched at the end of 2020 and initially included centralized lenders like BlockFi, Celsius, Nexo, Ledn and Hodlnaut. To apply for coverage, users must become members of the Nexus mutual and undergo know-your-client verification.
  • According to current figures, coverage is quite expensive. But given the overall positive track record of the exchanges added today it is likely that their cost of coverage would go down significantly over time.
  • It is also worth noting that Nexus is not an insurance provider. The difference largely comes from the fact that insurance has contractually defined clauses that establish how and when a claim should be honored.
  • Read the full story here

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